UK's Huawei decision ends uncertainty for 5G operators

Huawei ruling matters far more to politicians than to networks

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Reports that the UK government will allow Huawei to supply operators with kit for the radio element of 5G networks but not the core have been greeted with the usual hyperbole that has surrounded recent conversations about the Chinese mobile giant.

Depending on who you read this morning, the Prime Minister has either “banned” Huawei from 5G core networks or given the “green light” for the company to participate in the rollout of next generation networks.

The final decision won’t be confirmed until the Department for Culture, Media and Sport’s (DCMS) long-awaited report into the UK’s communications infrastructure is published – either later this month or in May.

But if these latest reports are correct, the truth is that nothing has really changed for mobile operators except that a huge source of uncertainty will have been eliminated.

The political fallout

The calls for Huawei to be banned from the UK’s 5G networks have largely been sparked by the US government’s long-held suspicions about the company and because 5G will support a new breed of mission-critical business applications.

This means 5G networks will carry unprecedented volumes of sensitive data and that any suspension to connectivity would be crippling.

Huawei has been excluded from the US’s telecoms infrastructure on national security fears, largely founded on the firm’s perceived links to the Chinese government and a belief that legislation requires firms in China to assist in state surveillance.

Huawei has repeatedly denied such allegations and has embarked on a widespread publicity blitz in recent months. It’s reclusive founder Ren Zhengfei has given interviews to western media outlets, it has taken out full page adverts in US newspapers, and Rotating Chairman Guo Ping told MWC that the US had “no evidence” for its claims.

This hasn’t stopped the US from applying pressure to its allies in the West to follow its lead. However, Huawei is a major supplier for operators in Europe elsewhere, while other nations, such as Germany, have been less keen to exclude the company.

The political consequences of a UK decision to allow Huawei’s radio kit to be used shouldn’t be ignored, especially when it comes to the ‘Five Eyes’ intelligence partnership with the US, Australia, Canada and New Zealand. Australia has barred Huawei from 5G, New Zealand has stopped one operator from using the company’s kit, and Canada is considering the matter.

Meanwhile, a formal ban for a Huawei could raise political tensions between the UK and China.

UK 5G impact

But in reality, such a ruling would have no impact on mobile operators. None of the major operators plan to use Huawei’s 5G kit in their core infrastructure, while EE is actively removing it from its 3G and 4G networks.

However, the prospect of being prevented from using Huawei radio kit has been an unwelcome one. Despite initial concerns the UK wouldn’t be a leader in 5G, EE, O2, Three and Vodafone have all confirmed plans to launch in 2019 – making the country one of the first to receive a commercial service from all major operators.

Any ban would reduce the pool of suppliers for operators to choose from, reducing competition and innovation while rising prices. The ban would also jeopardise the UK’s position as a 5G leader by delaying the widespread availability of services by 18-24 months. This could cost the UK economy as much as £6.8 billion.

The fact of the matter is that operators do not regard Huawei as a security risk and plan to use a mixture of kit from all vendors across their radio, transport and core layers.

“With the radio network, the risk is low because an attack on a base station isn’t effective [to steal data],” said Vodafone UK CTO Scott Petty earlier this year. “There are too many base stations and too many people who move around. Equally, it’s low risk from an infrastructure perspective as you could switch off one base station and although it would be inconvenient for a few users, we have 18,000 base stations.

“The effort to launch an attack on a base station is not worth the reward. It’d be easier to hack your phone.”

For Huawei, the allegations and restrictions have not yet had an impact on its bottom line. Sales rose by a fifth to more than $100 billion last year, while it has agreed 40 commercial contracts for 5G, shipping 45 base stations in the process.

Whatever the political fallout might be, it appears to be business as usual for UK operators.